Dani Rodrik speaks from my heart

Finally, someone from the ‘mainstream’ dares to speak the truth about how and why populists arise. I put ‘mainstream’ in quotes as a tribute to Dani Rodrik because he had always dared to differ from the ‘mainstream’ and yet is able to speak from the hallowed mainstream portals. A great art, that is.

IN calling attention to the hypocrisy of the so-called mainstream politicians and technocrats, Dani Rodrik is speaking from my heart. I have always maintained in my weekly columns in India’s MINT and in this blog that the real reason for the emergence of Trump or for the manner in which the Brits (outside of London and Scotland) voted for Brexit has to lie in the extremely self-centred behaviour of the elites cloaked in lofty rhetoric of free trade, free movement of labour, etc. The Panama and Paradise papers are proofs of that. In the process, they lost touch with their own people. We seem to have already forgotten that mainstream parties were badly mauled both in France and in Germany.

It is the breathtaking hypocrisy and the ‘holier than thou’ attitude of the so-called Liberals that awaken the contrarian in me, with respect to the so-called populists-nationalists.

Recently in Poland, even ordinary people felt compelled to join the rally of ‘Poland for Poles’. Read the story in Wall Street Journal carefully. Not all who joined the rally were white supremacists.

Rubbishing and dismissing those who do not serve our interests are supposed to be traits of intolerant demagogue-populist leaders?!

Professor Rodrik wants mainstream politicians to walk a fine path between eschewing/r rolling back

the free rein given to financial institutions, the bias toward austerity policies, the jaundiced view of government’s role in the economy, the unhindered movement of capital around the world, and the fetishization of international trade” and sticking to the inclusive path while keeping their politics “squarely within liberal democratic norms.”

The latter is do-able and should be pursued. But, there is plenty of room for debate on quite what an ‘inclusive’ path means as opposed to the conception of national identity.

Despite how far Professor Dani Rodrik has stuck his neck out in calling a spade a spade, even he is still stopping short of smashing all the holy policy cows that have either failed or been misdirected or have been abused. I will leave it at that. You can have your own guesses as to what that is. The hint is there in this post itself.

There is a second omission in his piece. He has not called out the central bankers and their role as policymakers in giving rise to inequality and alienation and hence the rise of populist-nationalists.

The third omission is about how central bankers and ex-Presidents continue to remain cosy or become cosier with Wall Street with their speaking engagements and fees. It is more than about the money they receive. It is a symptom of a malady – the complete capture of the political and policy decision-making arms of the government by a special interest group – the financial sector.

However, I must admit that he has partially addressed this by suggesting, for example, that Hillary Clinton could have signalled something like “I shall never again take a dime from Wall Street.” That is the right advice for Presidential contestants but what about ex-Presidents and ex-Central Bank Chairpersons, Governors and voting members?

Indeed, along with the things that he has called upon to be put on the table, even the pejorative tone with which the phrase, ‘populist-nationalists’ is used should be on the table for such an expression only further serves to alienate.

Since the U.S. Presidential elections, ‘the other side’ has done nothing like what Rodrik has advocated: ‘putting everything on the table’. Instead, they have doubled down further on their failed policies and rhetoric – both economic and social policies included. In doing so, they are doing the best possible service for the popularity of the causes espoused by the populists and for the appeal of the populists too.

That is why, Professor Rodrik’s piece is a much needed op.-ed. in calling out the hypocrites and that is where the solutions must start.

6 thoughts on “Dani Rodrik speaks from my heart

  1. their is other way to look at govt debt govt liability is private sectors asset.when govt reduces debt private sector asset will also go down.this explains why earnings are not coming back in indian stock market.


    1. I just read Noah Smith’s piece. I think Dani Rodrik’s piece already anticipates and covers the arguments he makes. India and China cannot be held up as examples of ‘neo-liberalism’. In fact, Dani Rodrik cites them as examples of countries that avoided the ‘neo-liberal’ model and hence, prospered better compared to Latin American and other nations. In any case, ‘neo-liberalism’ involves also extensive financialisation of the economy that has not happened yet in India and in China. So, Noah Smith fails to persuade.

      Liked by 1 person

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